The region that is now Wisconsin has probably been inhabited since the end of the glacial period, 10,000 years ago. Some of the earliest inhabitants were ancestors of the Menominee; these early immigrants from the north built burial mounds, conical ones at first, then large effigy mounds shaped like different animals. Other peoples arrived from the south and east, including ancestors of the Winnebago Indians (about AD 1400) and a tribe that built flat-top earthen pyramids. During the 17th century, the Ojibwa, Sauk, Fox, Potawatomi, Kickapoo, and other tribes came to Wisconsin. These tribes engaged in agriculture, hunting, and fishing, but with the arrival of Europeans, they became increasingly dependent on the fur trade—a dependence that had serious economic consequences when the fur trade declined in the early 19th century.

The first European believed to have reached Wisconsin was Jean Nicolet, who in 1634 landed on the shores of Green Bay while in the service of Samuel de Champlain. Two decades later, Médard Chouart des Groseilliers and Pierre Esprit Radisson, both fur traders, explored northern Wisconsin; in 1673, the Jesuit priest Jacques Marquette and the explorer Louis Jolliet crossed the whole area that is now Wisconsin, via the Fox and Wisconsin rivers, on their way to the Mississippi. Other Jesuits established missions, and French fur traders opened up posts. The French were succeeded by the British after the French and Indian War (the British ruled Wisconsin as part of Quebec Province from 1774 to 1783). Although ceded to the US in 1783, it remained British in all but name until 1816, when the US built forts at Prairie du Chien and Green Bay.

Under the Ordinance of 1787, Wisconsin became part of the Northwest Territory; it was subsequently included in the Indiana Territory, the Territory of Illinois, and then the Michigan Territory. In the early 1820s, lead mining brought an influx of white settlers called "Badgers." Indian resistance to white expansion collapsed after the 1832 Black Hawk War, in which Sauk and Fox Indians fleeing from Illinois were defeated and massacred by white militia near the site of present-day La Crosse, at the Battle of Bad Axe. Subsequently, the Winnebago and other tribes were removed to reservations outside the state, while the Ojibwa, Menominee, and some eastern tribes were among those resettled in reservations inside Wisconsin.

The Wisconsin Territory was formed in 1836. Initially it included all of Iowa and Minnesota, along with a portion of the Dakotas, but in 1838, these areas became part of a newly organized Iowa Territory. The 1830s also saw the beginning of a land boom, fueled by migration of Yankees from New England and southerners who moved to the lead-mining region of southwestern Wisconsin. The population and economy began to expand rapidly. Wisconsin voters endorsed statehood in 1846, and Congress passed enabling legislation that year. After a first constitution was rejected by the voters, a revised document was adopted on 13 March 1848, and on 29 May, President James K. Polk signed the bill that made Wisconsin the 30th state.

Transportation and industry did not develop as rapidly as proponents of statehood had expected. A canal was opened at the portage between the Fox and Wisconsin rivers in 1851, but the waterway was not heavily used. Railroads encountered difficulties in gaining financing, then suffered setbacks in the panic of 1857.

Wisconsinites took a generally abolitionist stand, and it was in Wisconsin—at Ripon, on 28 February 1854—that the Republican Party was formally established in the state. The new party developed an efficient political machine and later used much of its influence to benefit the railroads and lumber industry, both of which grew in importance in the decade following the Civil War. In that war, 96,000 Wisconsin men fought on the Union side, and 12,216 died. During the late 19th century, Wisconsin was generally prosperous; dairying, food processing, and lumbering emerged as major industries, and Milwaukee grew into an important industrial center.

Wisconsin took a new political turn in the early 20th century with the inauguration of Republican Robert "Fighting Bob" La Follette as governor and the dawning of the Progressive Era. An ardent reformer, La Follette fought against conservatives within his own party. In 1903, the legislature, under his prodding, passed a law providing for the nation's first direct statewide primary; other measures that he championed during his tenure as governor (1901–06) provided for increased taxation of railroads, regulation of lobbyists, creation of a civil service, and establishment of a railroad commission to regulate intrastate rates.

La Follette was also a conspicuous exponent of what came to be called the "Wisconsin idea": governmental reform guided by academic experts and supported by an enlightened electorate. Around the time he was governor, the philosophy of reform was energetically promoted at the University of Wisconsin (which had opened at Madison, the state capital, in 1849), and many professors were drafted to serve on government commissions and boards. In 1901, Wisconsin became the first state to establish a legislative reference bureau, intended to help lawmakers shape effective, forward-looking measures.

After La Follette left the governor's office to become a US senator, his progressivism was carried on by Republican governors James O. Davidson (1906–11) and especially by Francis E. McGovern (1911–15). During one session in 1911, legislators enacted the first state income tax in the US and one of the first workers' compensation programs. Other legislation passed during the same year sought to regulate the insurance business and the use of water power, create forest reserves, encourage farmer cooperatives, limit and require disclosure of political campaign expenditures, and establish a board of public affairs to recommend efficiency measures for state and local governments. This outburst of activity attracted national attention, and many states followed in Wisconsin's footsteps.

While serving as US senator (1906–25), La Follette opposed involvement in World War I and was one of only six senators to vote against US entry into the war; as a result, he was censured by the state legislature and the faculty of the University of Wisconsin, and there was a move to expel him from the Senate. His renomination and reelection in 1922 served to vindicate him, however, and he carried Wisconsin when he ran in 1924 for president on the national League for Progressive Political Action ticket.

After his death in 1925, the reform tradition continued in Wisconsin. A pioneering old-age pension act was passed in 1925; seven years later, Wisconsin enacted the nation's first unemployment compensation act, with the encouragement of La Follette's son Philip, then serving his first term as governor. When Wisconsin went Democratic in November 1932, turning Philip out of office, he and his brother, Robert, Jr., a US senator, temporarily left the state Republican organization and in 1934 formed a separate Progressive Party; that party, with the support of President Franklin Roosevelt and the Socialists, swept the 1934 elections and returned both brothers to office. During his second and third terms as governor, Philip La Follette successfully pressed for the creation of state agencies to develop electric power, arbitrate labor disputes, and set rules for fair business competition; his so-called Little New Deal corresponded to the New Deal policies of the Roosevelt administration.

After World War II, the state continued a trend toward increased urbanization, and its industries prospered. The major figure on the national scene in the postwar era was Senator Joseph R. McCarthy, who served 10 years in the Senate, launching unsubstantiated attacks in the early 1950s on alleged communists and other subversives in the federal government. After McCarthy's censure by the US Senate in 1954 and death in 1957, the Progressive tradition began to recover strength, and the liberal Democratic Party grew increasingly influential in state politics. There was student unrest at the University of Wisconsin during the 1960s and early 1970s, and growing discontent among Milwaukee's black population. A major controversy in the 1970s concerned a court-ordered busing plan, implemented in 1979, aimed at decreasing racial imbalances in Milwaukee's public schools. In 1984, the Milwaukee school board filed suit in federal court, charging that the policies of the state and suburban schools had resulted in an unconstitutionally segregated school system that restricted blacks to city schools. Two years later, the city school board and nine suburban districts agreed on a plan by which minority students from the city would transfer voluntarily to the nine suburbs, and suburban students would attend Milwaukee schools.

Wisconsin's economy, with its strong manufacturing and agricultural sectors, remained sound throughout the 1980s and into the 1990s. The dairy industry, traditionally a mainstay of the economy, was linked to two different environmental issues. The first was the 1993 contamination of Milwaukee's drinking water with harmful bacteria that made thousands of people sick and killed some of them. Some claimed that the organisms had come from agricultural runoff containing animal wastes. The second issue was the use of bovine growth hormone to bolster milk production.

Flooding of the Mississippi River in 1993 caused massive damage in Wisconsin. Forty-seven counties were declared federal disaster areas; four people were killed; and financial losses totaled $900 million.

In 2003, Wisconsin faced a $3.2 billion two-year budget deficit. Governor Jim Doyle, elected in 2002, became the first Democratic governor to be elected in Wisconsin in 16 years. Doyle, who advocated abortion rights, gun control, and environmental protection, was at odds with the Republican-controlled state legislature over issues of state spending on health care and public education, and on raising taxes. Doyle promised to counteract the budget shortfall with deep spending cuts, which might threaten local services.